Situational Analysis: Under Armour

Under Armour, Nike and Adidas are the top three brands known worldwide. These three companies were able to gain a strong brand to make a name for themselves in the sports apparel market today. On the other hand, Under Armour has become one of the top leading distributing companies to offer athletic apparel, footwear amongst many other things. “In 2013, Under Armour had a 14.7 percent share of the U.S market, compared quite favorably with Nike’s 27 percent market share and Adidas’s 7.4 percent market share.” (C-50) However, the company’s path of success can come crashing down as you take a look

Threats-Tax increases placing additional financial burdens on under armour could be a threat. The financial burden of increasing interest rates could be a threat to under armour. Changes in the way consumers shop and spend and other changing consumer patterns could be a threat to under armour’s performance. The actions of a competitor could be a major threat against under armour for instance it they bring in new technology or increase their workforce to meet demand. Substitute products available on the market present a major threat to under armour. Hard competition from companies such as nike and adidas. Recession may impact the sale of company. Low price importers can fetch market share. Male dominated focus.

a. Under Armour’s approach towards innovation is very unique, they think and plan out their projects thoroughly in order to create a one of a kind product that could be appealing to their consumers. The company has been extremely progressive throughout the years in order to stay ahead of the other competitive companies in their targeted industry. By constantly updating and coming up with different product lines, such as compression shirts and cleats, Under Armour is able to compete with other top athletic wear company’s in their market. If

Under Armour’s business strategy towards market segmentation is broken down into three different basis; Age, Gender, Uses. The first major market segmentation is by age, different age groups demand different products and Under Armour has produced certain merchandise to appeal to each generation. The second is Gender, both male and female respectively make up roughly 50% of the market equally.To appeal to females UA produces apparel in brighter colo, as a fashion forward athletic wear. While for males they they cater toward masculine vibe of tight fitting and resistant to wear and tear. Lastly, UA segments by the range of uses for their products.

The also place a big emphasizes on the Under Armour logo and pushed for brand recognition. Under Armour became the official uniform sponsor for many colleges and sport teams. Under Armour’s strategy was to design and make varies styles of sports apparel with their moisture-wicking fabrics to satisfy the needs of athletes of all levels and all sports. Their growth strategy was to continue to expand on the products they offered their consumers. They wanted to create more products that encompassed several sports and activities. By doing this they would be targeting additional consumers with their new performance products. Part of the growth strategy was to expand sales in foreign countries, become a global competitor in sports apparel and strengthening the appeal of their products and brand

There is a high threat of substitutes in the athletic gear industry especially when competing with companies such as Nike and Adidas who have been around much longer, have the funds to continuously innovate their products and already hold a large market share. Under Armour has used “authenticity” as it’s guiding principle to grow the company and advertise their products, but if they wish to be the number one brand of athletic gear they will have to appeal to people who are also concerned with the look of the product and not just performance. According to research done by NPD Group, almost 80 percent of activewear is used for non-sports activities. “Under Armour will need to find a

Under Armour’s (UA) current CEO Kevin Kant founded the company in 1996, which has witnessed the company grow in recent years to become a key player in the sporting gear and apparel industry. UA focuses its products and marketing efforts towards the youth, men, and women. The amount of resources that are allocated to each group of customers differs in that initially, UA primary source of revenue was from men even if youth and women products were also produced and sold. The specificity of UA’s products and their sporting activities selectivity can be attributed to UA’s limited global market share in the sporting gear and apparel industry. The company’s mission statement is inspiring, but in order to gain competitive advantages against larger

Under Armour faces intense competition such as Nike and Adidas. They play an important role in sportswear products, and have a strong market outside North America where Under Armour has a limited presence in international market (Trefis

Under Armour, Inc. is ranked among the established sports Kit producers across the globe. It thus enjoys massive sales in several markets. Under Armour has its headquarters Baltimore, Maryland with Kevin Plank as the current Chief Executive Officer (CEO) and Robin Thurston as the Chief Finance Office. The company is committed to developing its brand continuously through advertisement. It is presently listed on the New York Stock Exchange (NYSE) market with a share price of $46.99. The company through its CEO believes that for the company to remain viable in the market, it has to ensure that that its products satisfy the taste of the consumers (Thompson, 2015). Clearly, this has bored fruits, basing the argument on the high consumer

The major weakness that has been identified is the lack of Under Armour’s lack of establishment and footprint of the brand around the world. Over 90% of the company's revenue comes from the North American market, which is a major source of concern. They are starting to become a larger brand in the golfing world which will help them gain market share in the western world but still doesn’t help with eastern Europe, Asia, and Africa. They can change this by sponsoring and equipping more soccer and cricket athletes and teams. These are some of the two largest sports in the world and if they are able to get their brand associated with these sports Under Armor will easily become a household

Although the primary reason for sports and athletic wear was initially intended for athletes, many individuals whom do not pursue sports such as students, stay at home mothers, senior citizens, among many others, wear athletic wear daily and do not participate in sports or athletic activities. In conclusion, Under Armors mission statement is short, sweet, simple and to the point. Under Armor’s top competitors consist of a strong mix of new as well as established companies expanding into performance products such as footwear, apparel, work-out wear and sports accessories. Under Armor also competes against sporting goods stores such as Academy, Dicks and Cabela’s. In addition, it competes with companies that specialize in outdoor apparel such as Nike, Adidas, Columbia Sportswear and The

Under Armour’s primary strength lie behind it's product quality and innovation. This quality of the product provides high performance and ultimately a strong brand image and loyalty. Another strength would be Under Armour’s ability to develop

Consistency tends to be the best assets that Under Armour has to their advantage. According to Plank, he states that the success of a business, "starts with a good product," and he continued to say that after you have a good product, "use front-end hustle with back-end muscle." Due to this consistent product that Under Armour produces, it has obtained a heavy customer loyalty. Sales and revenue speak for themselves. In 1996, Under Armour had revenues of fifty thousand dollars compared to 200 million in 2004.

As shown in Figure 2 of the Appendix, a Porter Five Force Analysis makes it clear that the overall rivalry within the athletic apparel industry is medium to high. Because Nike and Adidas already have a substantial amount of capital resources and other assets, Under Armour struggles against them to gain market share. 8Also, private labels of retailers and newer sports apparel companies could potentially pose a threat to Under Armour, but mostly due to the fact that Under Armour does not hold any fabric or process patents. This makes it extremely easy for any competitor to duplicate a product or process with no consequence. However, the threat of new entrants is not too troublesome within the industry because of the great capital cost required for branding, advertising, and meeting product demand. Furthermore, the sports apparel industry is in the maturity phase of the industry life cycle. This means that each company included in the oligopoly must

THREAT - LOW to MEDIUM: Interesting because Under Armour was a new organization not long ago entrants must differentiate somehow, powerful companies not willing to surrender market share and increasing apparel technology raises start-up costs.